Eastern Europe coal exit offers a €50bn clean power opportunity


By the end of the decade, Poland could treble the amount of clean energy in its power mix and slash carbon emissions 40% lower than the amount recorded last year. That is one of the key takeaways from the Investing in the Recovery and Transition of Europe’s Coal Regions report published by Philanthropies and New Energy Finance arms of the Bloomberg empire in partnership with the European Commission’s Coal Regions in Transition Platform.

The authors of the study considered environmental laggard EU member states Bulgaria, Poland, Czechia and Romania – which account for two-thirds, or 50 GW, of the grid connected European coal fleet which has thus far not announced decommissioning plans. Germany has 46 GW of coal generation capacity but it is all slated for decommissioning by 2038.

With the four East European nations having voiced little enthusiasm for the carbon neutrality pledge made as part of the commission’s European Green Deal, Bloomberg analysts modeled a least-cost energy scenario based on expected developments in the levelized cost of energy from generation assets and the cost of capital, with no changes to existing legislation. The analysts came up with optimized energy mixes for the four nations and compared the resulting generation portfolio profiles with those announced by each of the nations in their National Energy and Climate Plans (NECPs).

“To become the world’s first climate-neutral continent, we have to turn the page on coal,” said European Commission executive VP Frans Timmermans. “Letting go of an industry that has provided jobs for decades will not be an easy process but Europe is ready to support it. Poland, Czechia, Bulgaria and Romania can become leaders in the Just Transition and switch from coal to clean [energy] while contributing to [the] industrial leadership of Europe.”

The analysts calculated, following the four nations’ stated NECPs would see renewables advance to 31% of their total energy mix. However, pursuing the least-cost options instead would lead to 47% clean energy in the region and could unlock almost €50 billion of investment opportunities – what the report’s authors described as a “sustainable source of economic growth and income.”

That required sum is almost matched by the EU's response to sluggish climate policy adoption. Several months ago, the bloc agreed to implement a “Just Transition Fund,” which channels several billion euros to the continent's active coal mining. Several thousand workers need to be retrained and offered new economic activities to pursue. The Covid-19 outbreak gave impetus to EU leaders to increase the budget tor the just transition of these regions from €7.5 billion to €40 billion.

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Over the next decade, Poland could see 30 GW of solar and wind generation capacity – worth €27 billion – deployed. Doing so would cut power sector emissions by more than 40% compared to 2018 levels. By contrast, Poland’s NECP would only dent carbon emissions 19%. The coal-dependent nation looks to the fossil fuel for a huge 79% of its power mix, with just 13% zero-carbon technologies on the grid. That coal habit drives per capita emissions of 11t/CO2-equivalent – well above the EU average of 8.6t. The last decade, however, has seen Poland invest €10.5 billion in clean energy.


Coal power capacity could be halved in Czechia by 2030, with renewables trebling their share of the national energy mix on a least-cost basis. Solar and wind would account for just over 8.2 GW of capacity, propelling investment of €7 billion, compared to €2.9 billion of clean energy investment witnessed over the last decade. The country’s per capita emissions have reached 12.2t/CO2-equivalent, the highest of the four nations considered by the study. According to BloombergNEF, Czechia’s modest, 17% renewable energy target would still be missed under its current NECP, mainly because of an over-emphasis on solar by policymakers. The analysts found deploying more onshore wind would lead to higher capacity factors.


Using the least-cost energy scenario in Romania would reduce coal’s share of the power mix from 26% last year to 3% after 2027. Solar and wind would account for 40% of generation with around 10 GW of new capacity over the next decade – 4 GW more than envisioned under the NECP, with the current policy including a costly new nuclear power station. Government plans would see emissions fall 65% but Bloomberg’s model raises the figure to 71% – at less cost. With €5.2 billion invested in clean energy in Romania since 2010, the spending would nevertheless rise to €8.5 billion over the next ten years.


Bulgaria’s NECP appears the most inefficient of the four analyzed. It envisages replacing coal generation with gas plants, as well as renewables. That would lead to just a 20% reduction in energy-related emissions by 2030, according to the Bloomberg study. A least-cost approach, however, would see Bulgaria generate almost half its power from renewables, with another 32% from non-renewable but zero-carbon technologies. The resulting emissions reduction would come in at 70%. The €3.9 billion spent on clean power in Bulgaria since 2010 would expand to €6.2 billion by 2030, according to the study.

The authors of the report noted, 80% of the coal fleet in the four nations is not compliant with 2021 emissions standards and the costs for bringing them into line would be €1.6 billion in Poland alone – as the nation with the most emission-heavy coal-fired power generators.

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